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Can someone share the best way to enter the stock market for someone who is completely clueless on stocks in general yet wanted to dabble in them for quite some

Can someone share the best way to enter the stock market for someone who is completely clueless on stocks in general yet wanted to dabble in them for quite some time?

deleted 16y ago
[deleted]
idlewords 16y ago
Pretend you have $100K and set up a fake portfolio, and play with that for a bit. Meanwhile put aside a few thousand dollars you can afford to lose, and when you're comfortable enough with managing your fake portfolio, start investing for real.
- mleonhard 16y ago
  I used http://www.howthemarketworks.com/ http://www.howthemarketworks.com/ for about half a year and learned that making money on stocks is very difficult.
- theoj 16y ago
  I used Virtual Stock Exchange for a test portfolio last year. http://virtualstockexchange.com/Game/Homepage.aspx http://virtualstockexchange.com/Game/Homepage.aspx
radicaldreamer 16y ago
I'd be very careful, if you're not experienced at all, you could get wiped out pretty easily in a market with this much volatility. A lot of people would've said today's trading session was a great day to buy, but look what happened. This is what they call a Black Swan event and nobody's sure that we've seen the bottom yet. Edit: If you want to see an example of how these drops can be deceiving and might not represent the true bottom, look at Citi's chart: http://finance.yahoo.com/echarts?s=C+Interactive#chart2:symbol=c;range=5y;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined http://finance.yahoo.com/echarts?s=C+Interactive#chart2:symb... You don't want to be the guy who bought a large long position when the PPS was $20, thinking it would easily jump back up to 30 or 40.
- jarek 16y ago
  Yes - especially since right now everyone and their broker are thinking of ways to get in at those prices. Chances of you getting a decent deal while it's still around are slim, especially if you have no prior knowledge. If you don't know enough to know who the fool is in the market, you are the fool.
  - PakG1 16y ago
    True story, probably experienced by thousands of people. Know someone who was into daytrading stocks and such. He had a home, no mortgage, no debt. Ended up losing the home. Wife left, took the kids. Wife eventually came back with the kids, they live a simple life now in some apartment. Life is not what it was, but they're getting by. If you don't know what you're doing, you can lose everything. When you talk with truly successful traders (I know one who makes a million a year or more), you learn to appreciate that doing it well is difficult and requires a discipline that few people have.
    - jarek 16y ago
      The trick to getting rich is trading with other people's money. You win, you get commission. You lose, it's not your money.
      - pbhjpbhj 16y ago
        >You win, you get commission. You lose, it's not your money. You get a wage either way. If the bank profits you get a bonus too even if you lost your customers money. If you screw the bank up the gov bails you out and you still get a bonus.
      - PakG1 16y ago
        This fiduciary disconnect can create a lot of malevolent market behaviour if controls aren't in place. And more often than not, controls aren't in place. http://blogmaverick.com/2008/11/13/the-hedge-fund-disconnect/ http://blogmaverick.com/2008/11/13/the-hedge-fund-disconnect...
nickbp 16y ago
Unless you really want to play with buying/selling individual stocks, you're probably best off buying a broad-based index fund, which effectively buys you a slice of the entire stock market. Eg VTSMX/VTSAX Also, are your 401k and IRA/Roth fully funded? Be sure to do that first. (Assuming USA resident here)
- swolchok 16y ago
  Could you make an argument for bothering to fund 401k + IRA/Roth at 20-something? If I'm trying to get fuck-you money by 40, don't I need every dime in order to get there? My nest egg is in plain old savings right now because I view it as personal runway.
  - guelo 16y ago
    You're making a giant bet with your entire life, you're all in, you can't even afford a safety net.
  - btmorex 16y ago
    If you plan on being alive at 65, then yes you should. Both are fantastic investments because of the tax free growth. Basically everyone should follow this pattern with extra money they have: 1.) Max out employer matching in 401k 2.) Max out roth IRA contribution (in most cases, sometimes you might want a normal IRA) 3.) Max out individual 401k contribution limit 4.) Invest in other things.
  - dsl 16y ago
    If you can't afford to fully fund your 401k without thinking twice, you have bigger problems in your financial setup. $16,500 out of a $100k yearly salary is just stupid cheap. If you are not making $100k+, you are not going to have fuck-you money by 40. All the Facebook stock in the world still requires a liquidity event, which is unrealistic at the current valuation.
  - nickbp 16y ago
    I don't understand your implication that striving in a career endeavor requires that you spend all your income with nothing going to savings. If anything, healthy savings will allow you to take advantage of an unexpected opportunity, and/or lessen the impact of an unexpected obstacle. This 'backup plan' will also make it easier to take risks without having to worry as much about the potential for failure. In other words, savings provides you with options. But that's in terms of general savings. For retirement more specifically, you should definitely start now if you can afford it, due to the effects of compound interest. Try playing around with an interest calculator[1] to see why. But perhaps the best reason is that once you're 40 and have had a few curve balls thrown at you, you'll appreciate that regardless of how things turned out, you'll have put yourself in a good place financially for the long-term. For the record, I'm in my mid-20s myself, and across my Roth and my employer's SEP-IRA, around 20% of my income is going towards retirement (with other non-retirement savings on top of that). I've set up my direct deposit such that the Roth contributions are totally automatic. It just gets dumped into three index funds: US Stock, Intl Stock, and Bonds. I basically never need to think about the accounts except when rebalancing. It's nice. [1] Here's one: http://www.dinkytown.net/java/WaitCost.html http://www.dinkytown.net/java/WaitCost.html
X-Istence 16y ago
Find some low dollar stocks and put a couple hundred dollars in. Don't go for the big boys yet until you understand what trends to look for and how to manage that. I bought Atmel stock not too long ago, it has since doubled in price. I made my money and then some. I bought Jamba Juice when they were still below a dollar, they are now trading at around $2+. I didn't put a whole lot in, means I can't lose a whole lot, and I definitely won't become a millionaire, but at least it gives me the security that I won't be screwed because I put my eggs in one basket without knowing what I was doing.
georgieporgie 16y ago
Put your money into a Vanguard (lowest maintenance costs) targeted retirement account and leave it there. Dabbling in stocks is a good way to lose money. (by all means, trade stocks if you're serious, but if you're serious you wouldn't ask)

Can someone share the best way to enter the stock market for someone who is completely clueless on stocks in general yet wanted to dabble in them for quite some time?

deleted 16y ago

[deleted]

idlewords 16y ago

Pretend you have $100K and set up a fake portfolio, and play with that for a bit. Meanwhile put aside a few thousand dollars you can afford to lose, and when you're comfortable enough with managing your fake portfolio, start investing for real.

mleonhard 16y ago
I used http://www.howthemarketworks.com/ http://www.howthemarketworks.com/ for about half a year and learned that making money on stocks is very difficult.
theoj 16y ago
I used Virtual Stock Exchange for a test portfolio last year. http://virtualstockexchange.com/Game/Homepage.aspx http://virtualstockexchange.com/Game/Homepage.aspx

radicaldreamer 16y ago

I'd be very careful, if you're not experienced at all, you could get wiped out pretty easily in a market with this much volatility. A lot of people would've said today's trading session was a great day to buy, but look what happened. This is what they call a Black Swan event and nobody's sure that we've seen the bottom yet. Edit: If you want to see an example of how these drops can be deceiving and might not represent the true bottom, look at Citi's chart: http://finance.yahoo.com/echarts?s=C+Interactive#chart2:symbol=c;range=5y;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined http://finance.yahoo.com/echarts?s=C+Interactive#chart2:symb... You don't want to be the guy who bought a large long position when the PPS was $20, thinking it would easily jump back up to 30 or 40.

jarek 16y ago
Yes - especially since right now everyone and their broker are thinking of ways to get in at those prices. Chances of you getting a decent deal while it's still around are slim, especially if you have no prior knowledge. If you don't know enough to know who the fool is in the market, you are the fool.
- PakG1 16y ago
  True story, probably experienced by thousands of people. Know someone who was into daytrading stocks and such. He had a home, no mortgage, no debt. Ended up losing the home. Wife left, took the kids. Wife eventually came back with the kids, they live a simple life now in some apartment. Life is not what it was, but they're getting by. If you don't know what you're doing, you can lose everything. When you talk with truly successful traders (I know one who makes a million a year or more), you learn to appreciate that doing it well is difficult and requires a discipline that few people have.
  - jarek 16y ago
    The trick to getting rich is trading with other people's money. You win, you get commission. You lose, it's not your money.
    - pbhjpbhj 16y ago
      >You win, you get commission. You lose, it's not your money. You get a wage either way. If the bank profits you get a bonus too even if you lost your customers money. If you screw the bank up the gov bails you out and you still get a bonus.
    - PakG1 16y ago
      This fiduciary disconnect can create a lot of malevolent market behaviour if controls aren't in place. And more often than not, controls aren't in place. http://blogmaverick.com/2008/11/13/the-hedge-fund-disconnect/ http://blogmaverick.com/2008/11/13/the-hedge-fund-disconnect...

nickbp 16y ago

Unless you really want to play with buying/selling individual stocks, you're probably best off buying a broad-based index fund, which effectively buys you a slice of the entire stock market. Eg VTSMX/VTSAX Also, are your 401k and IRA/Roth fully funded? Be sure to do that first. (Assuming USA resident here)

swolchok 16y ago
Could you make an argument for bothering to fund 401k + IRA/Roth at 20-something? If I'm trying to get fuck-you money by 40, don't I need every dime in order to get there? My nest egg is in plain old savings right now because I view it as personal runway.
- guelo 16y ago
  You're making a giant bet with your entire life, you're all in, you can't even afford a safety net.
- btmorex 16y ago
  If you plan on being alive at 65, then yes you should. Both are fantastic investments because of the tax free growth. Basically everyone should follow this pattern with extra money they have: 1.) Max out employer matching in 401k 2.) Max out roth IRA contribution (in most cases, sometimes you might want a normal IRA) 3.) Max out individual 401k contribution limit 4.) Invest in other things.
- dsl 16y ago
  If you can't afford to fully fund your 401k without thinking twice, you have bigger problems in your financial setup. $16,500 out of a $100k yearly salary is just stupid cheap. If you are not making $100k+, you are not going to have fuck-you money by 40. All the Facebook stock in the world still requires a liquidity event, which is unrealistic at the current valuation.
- nickbp 16y ago
  I don't understand your implication that striving in a career endeavor requires that you spend all your income with nothing going to savings. If anything, healthy savings will allow you to take advantage of an unexpected opportunity, and/or lessen the impact of an unexpected obstacle. This 'backup plan' will also make it easier to take risks without having to worry as much about the potential for failure. In other words, savings provides you with options. But that's in terms of general savings. For retirement more specifically, you should definitely start now if you can afford it, due to the effects of compound interest. Try playing around with an interest calculator[1] to see why. But perhaps the best reason is that once you're 40 and have had a few curve balls thrown at you, you'll appreciate that regardless of how things turned out, you'll have put yourself in a good place financially for the long-term. For the record, I'm in my mid-20s myself, and across my Roth and my employer's SEP-IRA, around 20% of my income is going towards retirement (with other non-retirement savings on top of that). I've set up my direct deposit such that the Roth contributions are totally automatic. It just gets dumped into three index funds: US Stock, Intl Stock, and Bonds. I basically never need to think about the accounts except when rebalancing. It's nice. [1] Here's one: http://www.dinkytown.net/java/WaitCost.html http://www.dinkytown.net/java/WaitCost.html

X-Istence 16y ago

Find some low dollar stocks and put a couple hundred dollars in. Don't go for the big boys yet until you understand what trends to look for and how to manage that. I bought Atmel stock not too long ago, it has since doubled in price. I made my money and then some. I bought Jamba Juice when they were still below a dollar, they are now trading at around $2+. I didn't put a whole lot in, means I can't lose a whole lot, and I definitely won't become a millionaire, but at least it gives me the security that I won't be screwed because I put my eggs in one basket without knowing what I was doing.

georgieporgie 16y ago

Put your money into a Vanguard (lowest maintenance costs) targeted retirement account and leave it there. Dabbling in stocks is a good way to lose money. (by all means, trade stocks if you're serious, but if you're serious you wouldn't ask)